With an estimated US$1 billion in accumulated India-bound investment since 1991, dozens of Taiwanese companies still make hardly a drop in the subcontinent’s vast market, which remains difficult to penetrate. But the time may be ripe for more Taiwanese firms to set their sights on India.
Apache Footwear India (萬邦鞋業) — a contract maker of Adidas sneakers — is an example of one company that has had success.
Although Apache, which opened a factory with 15,000 employees in Andhra Pradesh three years ago, focuses on contract manufacturing for Adidas, its founder and vice president, Jerry Chen (陳錦郎), is impressed with the market potential he sees in the country with more than 1 billion people.
PHOTO: JOYCE HUANG
“The domestic market in India is an untapped market — like that in China two or three decades ago,” he told the Taipei Times recently.
Apache has not yet launched own-branded products to compete on the Indian market.
Chen said India was a smart choice for his shoe-making business because of adequate labor at prices even cheaper than in China.
Apache moved its assembly lines out of China because of a lack of labor and rising labor costs.
But Chen didn’t think of India at first. Instead, he thought of Vietnam. But then the country’s shoe-making industry was accused of dumping by the EU and Chen had second thoughts.
Today he says he is glad he chose India.
Chen said Taiwanese businesses operating in India must show commitment to their employees and localize some management since Indian workers can be highly loyal, although not as aggressive or relentless in their work as Chinese workers.
In India “there’s no need to worry that workers will steal your skills and start competition someday” as often happens in China, he said.
Chen said he hoped more Taiwanese businesses would consider India, as they could do well by introducing high-quality products.
But he also said average living standards and spending in India could not compete with Europe or the US.
Because of this, K.C. Yuan, managing director of Amagic Holographics India PVT Ltd, a subsidiary of K.Laser Technology Inc (光群雷射) in Taiwan, urged businesses interested in India to look for alternative materials available there for their manufacturing lines so as to cut costs and enhance the pricing competitiveness of their products.
Kuan named two other conditions businesses should evaluate before launching operations in India. Taiwanese firms eyeing India should be sure their products can be value-added and meet domestic demand in India.
“A 1 percent share of the Indian market will be big enough for any Taiwanese company to survive no matter how big the gap is here between the rich and the poor,” he said.
“But most importantly, your products have to find a niche here,” he said.
But some businesspeople consider India a risky market.
Businesspeople speaking on condition of anonymity said businesses needed to pull strings and bribe government officials to get the job done in India, much as they do in China. Others said the gap in business and work styles made it difficult to work with local employees.
Nor is the Indian government particularly friendly to Taiwanese companies, they said, since there are not many Taiwanese companies in India compared with their South Korean or Japanese rivals.
They also said the Indian government’s attempts to set up special economic zones had made little progress.
Either way, what is attractive to Taiwanese firms is the pickup in demand in India and the prospect of controlling a share.
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